Weekend Trader Series
November 17, 2024
Open Positions Update
- The Twilio (TWLO) January 17, 2025, 82.50-strike call was closed after hitting its target profit of +100%. If you have not already done so, please close out of your TWLO position at the earliest opportunity.
- The Ciena (CIEN) January 17, 2025, 62.50-strike call reaches its time-stop this Monday, November 18. Close the position at a limit price within range of the current market price when you place the order.
- Close the Iron Mountain (IRM) January 17, 2025, 115-strike call on Monday, November 18. Close the position at a limit price within the range of the current market price when you place the order.
The following is this week's recommendation:
Hims & Hers Health (HIMS)Place a limit order to buy the Hims & Hers Health (HIMS) February 21, 2025 17-strike call at a limit price within range of the current market asked price when you place your order. At the close on Friday, November 15, this option was offered at $5.20. HIMS closed at $19.32 on Friday, November 15.Do not attempt to enter this position after Monday's close.Please use the following guidelines to manage the position:- Exit the position if the option is at a 100% gain from your entry price.
- If the option has not reached its target profit by 3:00 p.m. Eastern time on Monday, December 9, close the position.
- If there is a change to the above closeout parameters, we will notify you in your regular Sunday evening communication.
Telehealth stock Hims & Hers Health (HIMS) nabbed an all-time high last week after a push above $30, which happens to be three times its 2019 initial public offering (IPO) price. The peak was followed by a sharp pullback, which may have been exaggerated by an unwinding of long positions associated with expiring November call open interest (OI) and delta-hedge selling related to heavy out-of-the-money OI in 11/22 through standard December options.
There is plenty of support lingering below to capture this latest downturn, making now a good time to bet on a rebound. The $19-20 region is home to the last put-heavy strikes, the 50-day moving average, and a trendline connecting higher lows since September.
The shares are also above the 61.8% Fibonacci retracement level connecting their September low and recent high, and $17.90, which represents double the stock’s 2023 close.
Short interest has nearly tripled since March, and shorts will likely use the recent pullback to cover, as most have been burned by the stock’s outperformance. This could add fuel to the equity’s rally in the coming months.
Our recommended February 21, 2015 17-strike call has a leverage ratio of 2.8, and will double on a 39.2% rise in the underlying security.
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